Bernie paid off corrupt banker
2011-11-10 09:09
COURT CASE: Bernie Ecclestone has admitted to paying Gerhard Gribkowsky to not speak to tax authorities.
Formula 1 supremo Bernie Ecclestone told a German court he had paid a former BayernLB banker to stay quiet and keep tax authorities at bay while acquiring the rights for his sport five years ago.
Gerhard Gribkowsky, a former employee of Germany's second-largest public sector Landesbank, is on trial, charged with selling Formula 1 rights in return for a bribe, with the involvement of Ecclestone.
Gribkowsky is charged with bribery, embezzlement and tax evasion in a deal that cost the bank R741m with him pocketing about R348m as part of a bribe, according to prosecutors.
Ecclestone said he was concerned Gribkowsky could talk to British tax authorities about his businesses and, even if he was legal and correct, a tax probe might be damaging and costly.
Ecclestone confirmed he had paid off the banker. "I had no alternative at the time," he said.
"The only alternative was that the British tax authorities followed a case that would have been very expensive for me," said Ecclestone, who has immunity from prosecution for his testimony but not in general for his role in the affair.
"The tax risk would have exceeded two billion pounds (R25bn). I paid him (Gribkowsky) to keep calm and not to do silly things. I knew he wanted to start a business."
CONSTANT FEAR
Ecclestone said while Gribkowsky never threatened him by saying he would talk to the tax authorities, the Briton said he had lived with the constant fear of a tax probe.
"This was constantly at the back of my mind and I could not take that risk," said Ecclestone, who is the key witness in the German banker's trial.
BayernLB had a stake in Formula 1 up to 2006 along with JP Morgan, Lehman Brothers and Ecclestone's family trust.
The banks had acquired a 75% stake in F1 holding company SLEC after the collapse of Germany's Kirch media group, which had borrowed some R12bn from them.
BayernLB was Kirch's biggest creditor.
SLEC was sold to the current Formula 1 rights holders, private equity firm CVC, in 2006 with Ecclestone remaining hands-on in running the business.
The trial follows Gribkowsky's arrest in January, 2011 and is expected to last several months.
